MarketWatch.com - Pre-Market Indications

Friday, May 30, 2008

Blood money stains the hands of more than 25% of members of the U.S. House and Senate

Who profits from the Iraq war? More than a quarter of senators and congressmen have invested at least $196 million of their own money in companies doing business with the Department of Defense (DoD) that profit from the death and destruction in Iraq.

According to the latest reports, 151 members of Congress invested close to a quarter-billion in companies that received defense contracts of at least $5 million in 2006. These companies got more than $275.6 billion from the government in 2006, or $755 million per day, according to FedSpending.org, a website of the watchdog group OMBWatch.

Congressmen gave themselves a loophole so they only have to report their assets in broad ranges. Thus, they can be off as much as 160 percent. (Try giving the IRS an estimate like that.) In 2004, the first full year after the present Iraq war began, Republican and Democratic lawmakers-both hawks and doves-invested between $74.9 million and $161.3 million in companies under contract with the DoD. In 2006 Democrats had at least $3.7 million invested in the defense sector alone, compared to the Republicans' "only" $577,500. As the war raged on, so did the billions of profits-and personal investments by Congress members in war contractors, which increased 5 percent from 2004 to 2006.

Investments in these contractors yielded Congress members between $15.8 million and $62 million in personal income from 2004 through 2006, through dividends, capital gains, royalties and interest. Sen. John Kerry (D-Mass.) and Rep. James Sensenbrenner (R-Wis.), who are two of Congress's wealthiest members, were among the lawmakers who garnered the most income from war contractors between 2004 and 2006: Sensenbrenner got at least $3.2 million and Kerry reaped at least $2.6 million.

Members of the Senate Foreign Relations and Armed Services committees which oversee the Iraq war had between $32 million and $44 million invested in companies with DoD contracts.

War hawk Sen. Joe Lieberman (IConn.), chairman of the defense-relatedSenate Homeland Security and Governmental Affairs Committee, had at least $51,000 invested in these companies in 2006.

Sen. Hillary Clinton (D-N.Y.), who voted for Bush's war, had stock in defense companies, such as Honeywell, Boeing and Raytheon, but sold the stock in May 2007.

Of the 151 members whose investments are tied to the "defense" (war)industry, as far as we know, not one of them offered to donate their bloodstained profits to the national treasury to offset the terrible debt they have imposed. Has one of them even offered to donate one cent of their war profits to lessen the debt that increases more than $1 million a minute?

When our boys and girls are wounded the government bills them to return their reenlistment bonus. They have to return any pay they received while they were hospitalized. They have to pay for their helmets and uniforms that are destroyed in the hell of war. But they keep on fighting for these politicians' right to keep their war profits.

U.S. stock futures are trading mildly higher heading into the open, indicative of a potentially positive start to the regular session. In overseas trading, Asian exporters – including Canon and Toyota Motor – were lifted on a weaker yen, while European stocks got a boost from lower crude-oil prices. In focus this morning are earnings from Dell and Tiffany & Co., as well as merger-and-acquisition news (or lack thereof) from United Airlines and US Airways.

Stepping into the earnings limelight yesterday after the close was computer guru Dell (DELL: sentiment, chart, options) . The company reported first-quarter earnings of 38 cents per share, up 4 pennies from the same period a year ago, while revenue for the quarter docked at $16.08 billion. Analysts, on average, were looking for a first-quarter profit of 34 cents per share on revenue of $15.7 billion. Already this morning, the prince of PCs was upgraded to "buy" from "neutral" at Merrill Lynch, and the shares are set to open roughly 10% higher.

In other earnings news, high-end jeweler Tiffany & Co. (TIF: sentiment, chart, options) reported first-quarter net income of $64.4 million, or 50 cents per share, up from $54.1 million, or 39 cents per share, a year earlier. Revenue rose to $668.1 million from $595.7 million. The Street was calling for earnings of 40 cents per share on sales of $647.6 million. In addition, the firm upped its fiscal-year earnings guidance by 5 cents, and announced plans to introduce a new, smaller store format later this year.

Elsewhere, The Wall Street Journal this morning reported that a merger between United Airlines (UAUA: sentiment, chart, options) and US Airways (LCC: sentiment, chart, options) is off the table, with the companies reportedly slated to officially announce the news today. Now, it seems United is close to an alliance – not a merger - agreement with sector peer Continental Airlines ( CAL: sentiment, chart, options) .